Azad Engineering
Book Building issueMainboard₹740 Cr issue
+35.50%
Listing gain over issue price
Issue size
₹740 Cr
1 lot at cut-off
₹14,672
Lot size
28shares
Open
20 Dec 2023
Close
22 Dec 2023
Allotment
26 Dec 2023
Listing
28 Dec 2023
Listing performance
Issue price
₹524
Listed at
₹710
Listing-day close
₹677.50
Latest price
₹2,478.70
Close on 23 Oct 2026
Listing gain
+35.50%
Return since issue
+373.03%
Scheduled dates
Tentative timetable — a past date is not confirmation the step completed
Issue details
- IPO date
- 20 Dec 2023 – 22 Dec 2023
- Listing date
- 28 Dec 2023
- Face value
- ₹2 per share
- Issue price
- ₹524 per share
- Lot size
- 28 shares
- Issue type
- Book Building issue
- Total issue size
- ₹740 Cr
- Market cap at offer price
- ₹3,098 Cr
- Promoter holding
- 78.61% → 65.90% pre-issue → post-issue
- ISIN
- INE02IJ01035
- Registrar
- Kfin Technologies Ltd.
- Lead managers
- Axis Capital Ltd.
- Registered office
- 90/C, 90/D, Phase-1, I.D.A.Jeedimetla, Telangana
Reservation and application size
How the issue is split between investor categories, and what each may bid
| Investor category | Shares | % of net | % of total |
|---|---|---|---|
| Anchor investor · within QIB | 42,13,731 | — | — |
| Market maker | 0 | — | — |
Application size
Minimum 28 shares per lot, in multiples, at ₹524
| Application | Lots | Shares | Amount |
|---|---|---|---|
| Retail (min) | 1 | 28 | ₹14,672 |
| Retail (max) | 13 | 364 | ₹1,90,736 |
| S-HNI (min) | 14 | 392 | ₹2,05,408 |
| S-HNI (max) | 68 | 1,904 | ₹9,97,696 |
| B-HNI (min) | 69 | 1,932 | ₹10,12,368 |
Category limits
| Category | Bid size | Cut-off |
|---|---|---|
| Retail (RII) | Up to ₹2 lakh | Yes |
| Small HNI (sNII) | ₹2 lakh – ₹10 lakh | No |
| Big HNI (bNII) | Above ₹10 lakh | No |
| Employee | Up to ₹5 lakh | Yes |
Bidding at cut-off means accepting the final issue price without naming one. Only retail and employee applicants may do so.
Anchor investors
Institutional allocation placed a day before the issue opens, carved out of the QIB portion and locked in after listing.
Shares allocated
42,13,731
Anchor portion
₹221 Cr
at ₹524 per share
Valuation and performance
Valuation at offer price
₹524 per share
| Metric | Pre-issue | Post-issue |
|---|---|---|
| EPS (₹) | 1.79 | — |
| P/E (×) | 292.74 | — |
| Market cap | — | ₹3,098 Cr |
Key performance indicators
Latest reported period
- Return on net worth
- 4.23%
- ROCE
- 12.99%
- Debt / equity
- 1.47
- PAT margin
- 3.20%
- NAV per share
- ₹42.30
Single period as reported. Year-on-year movement is in the financials table below, where every period is published.
About Azad Engineering
Azad Engineering Limited is one of the key manufacturers of qualified product lines supplying to global OEMs in the energy, aerospace and defence, and oil and gas industries. The company manufactures complex and highly engineered precision forged and machined components that are mission and life-critical, with some products having a 'zero parts per million' defects requirement. As of September 30, 2023, the company generated revenue of ₹1,142.92 million from sale of airfoils/blades for the energy industry, comprising 72.00% of total revenue from operations. The company's customers include global OEMs such as General Electric, Honeywell International Inc., Mitsubishi Heavy Industries, Ltd., Siemens Energy, Eaton Aerospace and MAN Energy Solutions SE. The company was originally incorporated as 'Azad Engineering Private Limited' on September 14, 1983, and was converted to a public limited company on September 5, 2023.
Company Analysis
from RHPAzad Engineering Limited manufactures highly engineered, complex and mission-critical precision forged and machined components for global original equipment manufacturers in the energy, aerospace and defence, and oil and gas industries.
Azad Engineering Limited is one of the key manufacturers of qualified product lines supplying to global OEMs in the energy, aerospace and defence, and oil and gas industries. The company manufactures complex and highly engineered precision forged and machined components that are mission and life-critical, with some products having a 'zero parts per million' defects requirement. As of September 30, 2023, the company generated revenue of ₹1,142.92 million from sale of airfoils/blades for the energy industry, comprising 72.00% of total revenue from operations. The company's customers include global OEMs such as General Electric, Honeywell International Inc., Mitsubishi Heavy Industries, Ltd., Siemens Energy, Eaton Aerospace and MAN Energy Solutions SE. The company was originally incorporated as 'Azad Engineering Private Limited' on September 14, 1983, and was converted to a public limited company on September 5, 2023.
EnergyAerospace and DefenceOil and Gas
Objects of the Issue
- Funding capital expenditure of our Company ₹603.95 million p.20
- Repayment/ prepayment, in part or full, of certain borrowings availed by our Company ₹1,381.88 million p.20
- General corporate purposes p.20
- Funding capital expenditure p.44
- Repayment/prepayment of borrowings p.44
- General corporate purposes p.44
- Funding capital expenditure of our Company ₹603.95 million p.96
- Repayment/prepayment, in part or full, of certain of our borrowings availed by our Company ₹1,381.88 million p.96
- General corporate purposes [●] p.96
- Not disclosed in this document excerpt (Part 7 of 9 contains financial statements and does not include the 'Objects of the Offer' section)
Issue Structure
- Total Issue
- Up to ₹7,400.00 million aggregating up to [●] Equity Shares of face value of ₹2 each
- Fresh Issue
- Up to ₹2,400.00 million aggregating up to [●] Equity Shares of face value of ₹2 each
- Offer for Sale
- Up to ₹5,000.00 million aggregating up to [●] Equity Shares of face value of ₹2 each
- Price Band
- [●] per Equity Share (Floor Price) to [●] per Equity Share (Cap Price)
- Lot Size
- [●] Equity Shares and in multiples of [●] Equity Shares thereafter
- Face Value
- ₹2 each
Business Model
The company earns revenue from the manufacturing and sale of precision forged and machined components to global OEMs across energy, aerospace and defence, and oil and gas industries. Revenue is generated through purchase orders, long-term agreements, and tenders from customers.
Business Segments
Manufacturing airfoils/blades and other precision forged and machined components for energy industry customers
Manufacturing precision forged and machined components for aerospace and defence industry
Manufacturing precision forged and machined components for oil and gas industry
Precision contract manufacturing for automotive OEM customers
Precision contract manufacturing for aerospace OEM customers
Precision contract manufacturing for defence sector customers
Precision contract manufacturing for oil & gas sector customers
Precision contract manufacturing for industrial sector customers
Supplies precision forged and machined components for energy turbines used in industries and power plants with different fuel types
Manufactures turbine airfoils/blades for gas, nuclear and thermal turbines used in power generation and industrial applications, plus non-airfoil components such as special machined parts and combustion component assemblies
Manufactures aerospace and defence components including airfoils/blades, engine parts, auxiliary power unit (APU) components, hydraulic systems, actuators, and missile systems components
Manufactures components for drilling rigs and downhole drilling tools used in exploration and production phase
The company is treated as a single business segment manufacturing 3D rotating airfoils/blades for turbines (industrial, gas, nuclear, thermal), components for aerospace and defence (engines, APUs, hydraulics, flight controls), and drilling components for oil and gas. Products range from airfoils/blades for energy turbines to critical components for commercial and defence aircraft.
SWOT Analysis
Strengths
- • No unplanned manufacturing shutdowns in recent history(p.45)
- • Consistent revenue growth trajectory(p.46)
- • High capacity utilization rates across facilities(p.47)
- • No fatalities or significant employee injuries(p.51)
- • No cyber data breaches or confidential information leakage(p.53)
- • No labor strike history(p.52)
- • Highly engineered, complex, mission and life-critical high precision components(p.105)
- • Long-standing and deep customer relationships with global OEMs(p.105)
- • Advanced manufacturing facilities with diverse product range and innovation focus(p.105)
- • Consistent track record of financial performance(p.105)
- • Supplying to OEMs with high global market penetration(p.105)
- • High gross margin of 88.02% in FY2023(p.107)
- • Established qualified supplier status with global OEMs controlling ~70% of gas turbine market(p.213)
- • High EBITDA margins (31.61% in FY23) among key competitors in machined components(p.202)
- • Strong revenue growth of 27% CAGR from FY20-FY23(p.202)
- • Long-standing customer relationships (10+ years with top customers)(p.214)
- • Significant manufacturing cost advantage resulting in superior margins(p.213)
- • High-precision manufacturing capability meeting 'zero parts per million' defect requirements(p.202)
- • Demonstrated efficiency in machining time reduction vs. global competitors(p.213)
- • Diversified customer base across 15 countries with 80.38% revenue from exports(p.215)
- • Strong long-term customer relationships with global OEMs(p.216)
- • High capacity utilization at manufacturing facilities(p.216)
- • Advanced manufacturing certifications and accreditations(p.216)
- • Sophisticated equipment and automation capabilities(p.216)
- • Rigorous quality control processes validated by customers(p.216)
- • Expertise in manufacturing highly complex, mission-critical components(p.231)
- • Diverse manufacturing capabilities across multiple industries(p.219)
- • Export excellence track record and Star Export House status(p.227)
- • Manufacturer of highly engineered, complex, mission and life critical high precision components for aerospace and defense(p.283)
- • Significant capital assets and production capacity expansion underway(p.304)
- • Strong revenue and profit growth trajectory(p.279)
- • Significant revenue growth and operating scale(p.341)
- • Tier 1 supplier status with substantial experience(p.341)
- • Strong customer base and export footprint(p.341)
Weaknesses
- • Negative operating cash flows in recent periods(p.45)
- • High debt levels requiring capital expenditure(p.55)
- • Untraceable historical corporate records creating governance risks(p.48)
- • Past delayed CSR utilization with penalty risk(p.48)
- • Incomplete insurance coverage versus total assets(p.49)
- • Trademark registrations incomplete and objected(p.51)
- • Operated facilities without timely factory licenses(p.51)
- • Outstanding material pending litigation and regulatory actions(p.50)
- • High concentration of revenue from customers outside India(p.107)
- • Low profit margin of 3.37% in FY2023 despite high gross margin(p.107)
- • Significant outstanding borrowings of ₹1,542.28 million as of September 30, 2023(p.99)
- • Concentrated shareholding with promoter holding 77.46% of equity(p.89)
- • Low return on net worth of 4.23% in FY2023(p.106)
- • High customer concentration with top 5 customers accounting for 63.11% of FY23 revenue(p.215)
- • Long trade receivable days of 140.17 days in FY23, extending working capital requirements(p.211)
- • Extended cash conversion cycle of 178.86 days in FY23(p.211)
- • Significant inventory holding period of 104.01 days in FY23(p.211)
- • Heavy dependence on key customers for revenue(p.216)
- • Dependence on promoter and management team(p.248)
- • Dependence on imported raw materials and components(p.226)
- • Concentrated manufacturing facility locations(p.222)
- • Reliance on limited lease arrangements for key manufacturing facilities(p.246)
- • Dependency on customer-approved sources for raw materials(p.224)
- • Significant financial leverage with high debt levels(p.277)
- • High finance costs impacting profitability(p.314)
- • Dependence on related party financing and guarantees(p.310)
- • Tax disputes and contingent liabilities(p.317)
- • Customs duty disputes on imported materials and capital goods(p.317)
- • No dividend paid despite profitability(p.269)
- • High dependence on few major customers(p.325)
- • Significant finance costs and leverage(p.344)
- • Outstanding tax contingent liabilities(p.366)
- • Pending GST tax demand and appeal(p.368)
- • Concentration of trade payables with three material creditors(p.368)
Opportunities
- • Capacity expansion into new manufacturing facilities(p.46)
- • Growth through enhanced design capabilities and product diversity(p.46)
- • Shift towards higher-value OEM manufacturing(p.46)
- • Capital deployment into machinery and equipment modernization(p.44)
- • Global energy industry growth with renewable power capacity expansion(p.129)
- • India's power consumption expected to grow from 1,296 TWh (FY22) to 2,133 TWh (FY32) at 5.8% CAGR(p.132)
- • India leveraging China plus one strategy for manufacturing diversification(p.122)
- • Government support through Make in India and Production Linked Incentive schemes(p.123)
- • Increased FDI into Indian manufacturing sector for supply chain diversification(p.124)
- • Engineering products exports growth with 23% share of total merchandise exports(p.126)
- • Expected revenue growth opportunities in aerospace and defence segments(p.126)
- • Aerospace & Defence components market growing at +9% CAGR from ₹990B (FY22) to ₹1,530B (FY27)(p.213)
- • India emerging as strategic procurement destination for OEMs due to low geopolitical risk(p.213)
- • Growth in Indian aircraft fleet with backlog orders representing ~9% of global orderbook(p.157)
- • Government-backed 'Make in India' and 'Atma Nirbhar' policies driving defence manufacturing consolidation(p.214)
- • Nuclear turbine components market growing at +8% CAGR, highest among turbine types(p.213)
- • Global commercial aircraft RPK expected to grow 12% CAGR from 2022-2027(p.214)
- • Oilfield drilling equipment market growing at +4% CAGR with drill bits reaching ₹340B by FY27(p.204)
- • Strategic positioning to supply F-414 engines for HAL's Tejas aircraft under GE-HAL MOU(p.164)
- • Expansion of product range for existing customers(p.218)
- • Qualification for new turbine components and programs(p.218)
- • Growth in international markets with higher margins(p.218)
- • New capacity expansion through dedicated manufacturing facilities(p.218)
- • Government-driven industry tailwinds and 'Make in India' initiatives(p.218)
- • Expansion of capability into less complex, high-volume products(p.218)
- • Consolidation of customer supplier bases for greater value capture(p.218)
- • Inorganic growth through acquisitions(p.218)
- • Expansion into new manufacturing facilities and geographies(p.304)
- • Growing demand for high-precision aerospace and defense components(p.283)
- • Addressable market growth in aerospace and defence(p.342)
- • Overall addressable market expansion(p.342)
Threats
- • Risk of cost overruns and delays in capital expenditure(p.47)
- • Dependency on third-party transportation and logistics(p.49)
- • High concentration of operations in Hyderabad(p.29)
- • Exposure to foreign exchange fluctuation risks(p.59)
- • Macroeconomic slowdown and Indian economy risks(p.58)
- • Regulatory compliance and changing labor laws(p.60)
- • Geopolitical risks and regional conflicts(p.62)
- • Inflation eroding profit margins(p.62)
- • Global economic slowdown and reduced advanced economy growth(p.120)
- • Competition from China and Eastern Europe in precision component manufacturing(p.105)
- • Dependency on energy sector which is transitioning away from fossil fuels(p.130)
- • Global FDI slowdown of 12% in 2022 affecting manufacturing investments(p.123)
- • Engineering products trade deficit of -$25 billion in FY23(p.126)
- • Russia-Ukraine war impacting global supply chains and energy costs(p.129)
- • Rising inflation and commodity prices affecting manufacturing competitiveness(p.126)
- • Shift away from coal-based power generation with new coal turbine market declining at -6% CAGR(p.175)
- • Global energy turbine components market flat at ₹283.25B (FY22) declining to ₹282.70B (FY27)(p.203)
- • Aerospace industry supply chain disruptions from multiple country dependencies(p.186)
- • High development costs and stringent qualification requirements limiting competition entry but increasing barriers(p.186)
- • Alternative energy sources (renewables) reducing long-term demand for traditional turbine components(p.176)
- • Customer switching facilitated by technological advancement in advanced materials and manufacturing(p.186)
- • Increasing geopolitical tensions affecting supply chain for materials and components(p.213)
- • Concentration of commercial aircraft manufacturing in duopoly (Boeing & Airbus) limits supplier bargaining power(p.157)
- • Global competition from manufacturers in developed nations(p.231)
- • Disruptions in international trade due to government restrictions(p.226)
- • Price reduction requirements in customer contracts(p.229)
- • Customer contract cancellation and termination rights(p.229)
- • Delays and penalties in customer contracts(p.229)
- • Supplier discontinuation and disruption risks(p.229)
- • Capacity expansion delays and cost overruns(p.231)
- • Dependence on few major customers for revenue concentration(p.305)
- • Working capital challenges and receivables collection risk(p.305)
- • Regulatory and customs compliance risks(p.317)
- • Foreign exchange exposure and volatility(p.314)
- • Inventory management and obsolescence risks(p.290)
- • Raw material price volatility and supply risks(p.344)
- • Foreign exchange exposure(p.345)
- • Customs duty contingent liability and export compliance risk(p.369)
Promoters
| Name | Role | Pre-Issue | Post-Issue |
|---|---|---|---|
| Rakesh Chopdar | Promoter / Promoter Selling Shareholder | 77.46% | — |
| Rakesh Chopdar | Promoter | — | [●]% |
| Rakesh Chopdar | Promoter | 77.46% | [●] |
| Kartik Chopdar | Promoter Group | 0.55% | [●] |
| Satwik Chopdar | Promoter Group | 0.27% | [●] |
| Jyoti Chopdar | Promoter Group | 0.26% | [●] |
| Babita Shripalsingh Sulhyan | Promoter Group | 0.02% | [●] |
| Deepak Chopdar | Promoter Group | 0.02% | [●] |
| Amit Walia | Promoter Group | 0.01% | [●] |
| Ella Walia | Promoter Group | 0.01% | [●] |
| Rakesh Chopdar | Promoter | — | — |
| Rakesh Chopdar | Promoter | 99.58% | 85.24% |
| Rakesh Chopdar | Chairman and CEO / Promoter | — | — |
| Jyoti Chopdar | Whole time director / Promoter Group | — | — |
| Rakesh Chopdar | Promoter | — | — |
| Rakesh Chopdar | Promoter Selling Shareholder | — | — |
| Piramal Structured Credit Opportunities Fund | Investor Selling Shareholder | — | — |
| DMI Finance Private Limited | Other Selling Shareholder | — | — |
Leadership
Rakesh Chopdar · Chairman and CEO / Promoter
Auto-extracted from the company's RHP using AI, with each fact linked to its source passage (hover any row to see the quote & page). Provided for research only, not investment advice — verify against the official RHP before relying on it.
Azad Engineering IPO FAQs
What is the lot size of Azad Engineering IPO?
The minimum lot size of Azad Engineering IPO is 28 shares. One lot costs ₹14,672 at the cut-off price.
When does Azad Engineering IPO open and close?
Azad Engineering IPO opened for subscription on 20 Dec 2023 and closed on 22 Dec 2023.
What is the listing date of Azad Engineering IPO?
Azad Engineering IPO listed on 28 Dec 2023.